How To Build Wealth With $0 - The Easy Way
Summary
TLDRThe video emphasizes the challenges faced by the financially disadvantaged in building wealth and offers unconventional advice for wealth accumulation. It suggests avoiding traditional financial tips and instead listening to successful individuals. The speaker recommends choosing careers with income potential beyond hourly wages, such as sales, and emphasizes the importance of investing early and consistently, even with small amounts. The video also encourages creating multiple income streams and provides a step-by-step guide to potentially reaching $500,000 in wealth within a decade, highlighting the importance of avoiding lifestyle inflation and investing additional income.
Takeaways
- πΌ The video emphasizes the challenge of wealth-building for those without a financial safety net and suggests that traditional advice is often insufficient.
- π° It highlights that only 30% of the poorest American families have savings accounts, indicating a significant portion of the population is financially vulnerable.
- π¦ The speaker argues against common financial misconceptions like avoiding credit cards or loans, and instead encourages learning from successful individuals.
- π The video suggests pursuing careers or businesses with income potential not capped by the number of hours worked, such as sales or entrepreneurship.
- πΉ It stresses the importance of investing early and often, using the power of compound interest to grow wealth over time.
- π² The speaker recommends opening a Roth IRA for tax-free growth and highlights the benefits of long-term investing for significant financial gains.
- π The video encourages creating multiple income streams, citing IRS research that shows a correlation between the number of income streams and higher earnings.
- π Real estate is presented as a powerful wealth-building tool, offering tax advantages and potential for both rental and capital gains income.
- β° The script advises against lifestyle inflation, which can erode savings, and instead suggests maintaining expenses while investing additional income from raises or side hustles.
- π The key to reaching financial goals is dedication, sacrifice, and strategic financial planning, which can potentially transform one's financial future within a decade.
Q & A
What is the main challenge faced by the poorest American families according to the script?
-The main challenge is that just 30% of the poorest American families have a savings account, and many working Americans still can't afford basic necessities like food and rent.
What percentage of Americans are said to be living paycheck to paycheck in the script?
-54% of Americans are said to be living paycheck to paycheck.
What is the average amount it would take for middle-class Americans to feel financially secure, as mentioned in the script?
-The average amount it would take for middle-class Americans to feel financially secure is $500,000.
What is the advice given for someone starting from nothing to build wealth, according to the script?
-The advice includes not following generic financial advice, being cautious about who you listen to, choosing a career or business not dependent on hours worked, and investing everything immediately.
Why are traditional jobs not recommended for building wealth quickly in the script?
-Traditional jobs are not recommended because they often pay hourly and have a ceiling on income based on the number of hours one can work, which limits the potential for wealth accumulation.
What career is suggested as a stepping stone to making more money in the script?
-Sales is suggested as a stepping stone to making more money because it can provide funding for other ventures and teaches important skills like time management and customer service.
What is the significance of investing early according to the script?
-Investing early is significant because it allows the money more time to grow. For example, $1 invested at 20 with a 7% return will be worth $21 by 65, whereas waiting until 30 will only yield $10.68 by 65.
What is a Roth IRA and why is it recommended in the script?
-A Roth IRA is a retirement account where contributions are made with after-tax dollars, and the profits are tax-free after the age of 59 and a half. It is recommended because it allows for tax-free growth and provides an additional avenue for investment.
How does the script suggest creating multiple sources of income can help build wealth?
-The script suggests that the more income streams one has, the more income they tend to make. It cites a study where 65% of millionaires have three or more sources of income, indicating diversification is key to wealth building.
What is the importance of avoiding lifestyle inflation when trying to build wealth according to the script?
-Lifestyle inflation occurs when one increases their spending as their income increases, which can prevent wealth accumulation. The script emphasizes maintaining the same expenses and investing the additional income to continue building wealth.
Outlines
π° Building Wealth from Scratch
The paragraph discusses the challenges faced by the poorest American families in building wealth, with only 30% having a savings account and many living paycheck to paycheck. It highlights the importance of financial security, suggesting that $500,000 is the average amount needed to feel secure. The speaker introduces their own recommendations for wealth-building, emphasizing the need to go against conventional advice and listen to successful individuals. The paragraph concludes with a call to action for viewers to like the video if they are interested in more content on this topic.
π Prioritizing Income Over Hours Worked
This section emphasizes the importance of choosing a career or business not tied to the number of hours worked, as this allows for greater income potential. The speaker suggests that traditional jobs often lead to a plateau in income, while result-based jobs can lead to significant financial growth. The paragraph also touches on the benefits of sales as a career, the potential for career-switching to increase income, and the value of investing early and consistently. The speaker stresses the importance of investing in a Roth IRA and the tax advantages it offers, particularly for those starting with little money.
π± Cultivating Multiple Income Streams
The paragraph focuses on the strategy of creating multiple sources of income to build wealth effectively. It cites IRS research indicating that more income streams correlate with higher earnings. The speaker lists common income sources for millionaires, such as job income, dividend income, capital gains, interest income, rental income, and side hustles. The importance of diversifying income sources is underscored, with real estate and side hustles highlighted as particularly effective methods for generating additional income.
β³ Time as the Great Equalizer
This section discusses the concept of time as a universal resource and the importance of using it wisely to build wealth. It provides a detailed plan for reaching a financial goal of $500,000, starting from scratch. The plan includes living on an average salary, minimizing non-essential expenses, saving and investing a significant portion of income, finding side hustles, and strategically changing jobs to increase income. The paragraph concludes with a warning against lifestyle inflation, which can erode savings, and encourages viewers to invest the difference when income increases.
π― Achieving Financial Goals Through Discipline
The final paragraph reiterates the importance of dedication, sacrifice, and pushing beyond comfort zones to achieve financial goals. It outlines a realistic path to accumulate wealth over a decade, emphasizing the potential to set up a secure financial future through consistent effort and smart investment strategies. The speaker encourages viewers to engage with the content by liking the video and subscribing for more, and also invites them to follow on Instagram for daily updates.
Mindmap
Keywords
π‘Wealth building
π‘Financial security
π‘Living paycheck to paycheck
π‘Inflation
π‘Investing
π‘Multiple income streams
π‘Lifestyle inflation
π‘Roth IRA
π‘Side hustle
π‘Compound interest
π‘Discretionary spending
Highlights
Wealthy individuals often have easier access to new income opportunities, whereas those with no financial safety net face greater challenges.
Only 30% of the poorest American families have a savings account, indicating a significant financial vulnerability.
Millions of Americans struggle to afford basic necessities like food and rent, highlighting the severity of financial instability.
54% of individuals report living paycheck to paycheck, suggesting a precarious financial situation for many.
Inflation is adversely affecting the middle class, with an average of $500,000 needed for financial security.
A unique solution is proposed for building wealth from scratch, diverging from common financial advice.
The importance of choosing a career or business not tied to hourly wages is emphasized for wealth accumulation.
Sales is highlighted as an underrated career choice that can lead to significant financial gains.
Switching careers strategically can lead to higher income and is recommended for wealth building.
Investing immediately and consistently, even with small amounts, is crucial for long-term wealth growth.
Opening a Roth IRA and contributing to it is suggested for tax-free profits and long-term growth.
The concept of 'lifestyle inflation' is introduced as a barrier to saving and investing effectively.
Creating multiple income streams is shown to be a common trait among millionaires, emphasizing diversification.
Real estate investment is presented as a powerful tool for wealth building with numerous tax advantages.
Side hustles and second jobs are encouraged as underutilized income sources to accelerate wealth accumulation.
A step-by-step plan is outlined to grow wealth from $0 to $500,000 in 10 years, even with an average income.
The video concludes with a call to action for viewers to apply the strategies discussed for transformative financial results.
Transcripts
what's up Graham it's guys here now
here's the thing if you're already
wealthy it's easy to find new ways to
make money but if you have nothing to
fall back on it's not exactly looking so
good it was recently found that just 30%
of the poorest American families have a
savings account millions of working
Americans still can't afford food and
rent 54% say they're living paycheck to
paycheck inflation is said to be
crushing the middle class and on average
$500,000 is the amount it would take to
make them feel financially secure
fortunately though there is a solution
for anyone who wants to build up their
wealth starting from nothing and it does
not involve the same cookie cutter
advice listed in every single article
like sh 15% of your income invest in a
401k live below your means don't go to
Coachella and make sure to get your free
stock Down Below in the description
because it's worth all the way up to
$1,000 even though I admit it's still
good advice and it's probably way better
than what the majority of people are
doing but in terms of effectively and
realistically building your wealth
starting from nothing regardless of your
education and background these are my
own recommendations that I have learned
firsthand because there are some
step-by-step rules that anyone can
follow that work incredibly well and
don't cost you a single penny besides of
course one like on the video it helps
out my channel tremendously and it also
gives me a good indication if this is
something you want to hear more of so if
it is let me know by hitting the like
button and I can do more like this in
the future so thank you guys so much and
now with that said let's begin all right
so my first piece of advice before we go
into these step-by-step specifics is
just this be careful who you listen to
there's a lot of people out there who
are totally broke but who love to give
Financial advice at any chance they
could get these are the kinds people who
tell you that only poor people get loans
that credit cards are bad that you have
to go to college to be successful and
that you shouldn't start a business
because it's too risky don't get me
wrong usually the people who tell you
these things have really good intentions
and they believe it themselves but the
fact is if you really want to build your
wealth you have to go against the grain
and do what most people are not doing
and that includes listening to people
who are where you want to be those are
the people who have done what you want
to do and chances are that is the advice
you should be listening to the second if
we're being honest and realistic here if
you want to build your wealth starting
without any money you're going to have
to actually go and make some money
someone had to say it and most likely if
your goal is to build up your wealth as
fast as possible you're not going to be
doing that through a traditional job
unless that job pays you some exorbitant
amount of money or you're really good at
poker so instead my recommendation is
this pick a career or a business that's
not dependent on how many hours you work
if you ignore the rest of the video but
you just focus on one point let it be
this because it's important anytime you
work a career that pays you hourly most
of the time you will Plateau rather
quickly there's just so many hours you
could work in a day before eventually
you Max yourself out and when you reach
that point you've hit a ceiling but by
working any job that pays based on
results your income has the potential to
skyrockets because now hours no longer
make a difference personally I think
sales is one of the most underrated
careers out there it's usually a
stepping stone to making more money
it'll teach you everything you need to
know about time management and customer
service and it could provide the funding
for almost anything you want to do later
on now if you're not the type who wants
to go into sales and you want something
a little bit more stable and consistent
but you still want to make more money
just consider this employees that stay
in their companies longer than 2 years
get paid an average of 50% less so in
the interim consider switching careers
leveraging your skills and using that as
a way to make more money especially now
when so many businesses are experiencing
a shortage of talent and are willing to
pay anything they can to find the right
person but overall I would say that most
people you hear about who built up a
crazy amount of wealth rather quickly
starting from nothing did so by starting
a business they saw an unfulfilled Niche
and they created a solution to a problem
or they saw an existing business doing
well but they found a way to do it even
better learning how to do this is not
expensive either and pretty much
everything you need to know is already
on YouTube for free and learning how to
be self-sufficient enough to find your
own answers is going to be an important
part to building your wealth long term
but now that we have some of that
self-help jargon out of the way here's
some of the best step-by-step steps that
you could use to build your wealth
starting from nothing and that would be
third get in the habit of investing
everything immediately like just get
this the average 25 to 34 4y- old
Millennial spends over $2,000 a year at
coffee shops and 41% admit to spending
more money on coffee than they do on
their own retirement and that's got to
stop right now that's because the more
time you allow for your money to grow
the more money you will have you know
someone should turn that into a t-shirt
now here's the thing to me it doesn't
exactly matter how much money you're
investing right now but instead how well
you maintain and sustain those habits
once you actually do start making a lot
of money for example keep in mind that
$1 invested at the age of 20 years old
at a 7% return is going to be worth $21
by the age of 65 but if you wait and
invest that very same $1 at the age of
30 instead you'll only have
$10.68 at the age of 65 and if you wait
even longer at 40 years old you'll only
have
$548 that means your money is worth
twice as much invested today as it is 10
years from now when I first learned
about that concept when I was 18 years
old it changed everything all of a
sudden that rewired my brain to see
every expense is taking away from what
it could be in the future and so I made
the choice to consistently invest
everything even though in the short term
I cut out all of my discretionary
spending then in addition to that you
should also open up a Roth IRA as soon
as possible and contribute to it this is
a retirement account that you can invest
money into and then all of the profit
you make is completely taxfree after the
age of 59 and a half which means if you
invested that $1 at 20 years old and now
it's worth $21 at the age of 65 you're
not going to pay any tax by the time you
cash out leaving you with a lot more
money left over for Lamborghinis and
Yachts now for anyone who wants to build
their wealth from nothing this is
especially good for two reasons first
you're probably not making a lot of
money right now so you're already in a
really low tax bracket and that means
you'll have more money left over with to
go and invest and second the sooner you
start the longer your money is going to
have a chance to grow which gives you
more money in the long term it's as
simple as that now in terms of how much
you should be saving the realistic
answer is as much as you possibly can
even though some financial advisers say
you got to save 10% of your income
someone has to say it but that's just
not enough just consider this if you
invest 10 % of your income starting at
the age of 20 years old it'll take you
about 51 years of doing that to
accumulate enough money for your
Investments to replace your income if
you bump that up to 30% it'll take you
28 years and if you manage to save 50%
of your income you could literally
retire in 17 years while your
Investments earn enough to sustain your
lifestyle indefinitely that's why
getting in the habit of saving as much
money as possible as soon as possible is
going to help you build your wealth as
fast as possible even if you're not
making a lot of money up front just
start because it's going to be a lot
easier iier to maintain once you do
actually start making more money then
once you've done all of that here's the
secret sauce number four create multiple
sources of income now this one is so
important that the IRS actually
published their research on high income
tax returns to study the distribution of
economic well-being or in other words
they wanted to know why some people made
more money than others and what they
found is that generally the more income
streams you have the more income you
tend to make so when you see that 65% of
millionaires have three or more sources
of income I would take that into
consider consideration and do your best
to diversify as much as you can now if
you're curious which income streams are
the most common for millionaires
mentioned in the study the main income
Source was derived from a job or earned
income from a paycheck this is where
almost everybody starts off and it's the
equivalent of you working a normal 9
to-5 job or being paid a salary or
working on commission as the main source
of income for most people this is the
cash cow that makes everything else
possible and funds the remaining income
sources like number two dividend income
this is probably the easiest second
income source that pretty much everyone
watching could start literally right now
and it's as simple as this go to any
free stock trading brokerage like public
Down Below in the description because
they will give you a free stock worth
all the way up to $1,000 when you use
the code Graham then go and buy any
dividend stock out there and Bam you're
done depending on what you buy dividends
could range anywhere from 6% if you're
investing in apple to 7.6% if you're
buying AT&T generally the higher the
dividend the more risk you take but you
could even throw it in something like a
broad Index Fund like vfix which pays
you 1.3% a year year the third closely
related to that is capital gains this is
what happens when you sell an investment
for profit and the amount of money you
make is what's called your capital gain
and even better if you hold that
investment for longer than a year it's
going to be taxed at long-term capital
gains rates which is a lot lower than
the taxes you pay from actively working
and if you make under $40,000 a year the
long-term capital gains tax rate you
will pay is 0% now fourth another income
Source could be interest income this is
what happens when you keep your money in
a high yield savings account or pretty
much any bank account that pays you
interest interest at the end of the year
they will issue you a $199 interest form
that you report to the IRS as another
source of income now fifth once you
start earning enough money you could
also Branch out to this one and that
would be rental income now personally
this is my favorite from the entire list
and it's where I placed most of my focus
throughout the last 10 years in terms of
buying properties fixing them up and
then renting them out for cash flow for
most people who want to invest their
money and build wealth real estate has
so many tax advantages that make it very
unique and profitable for anyone who
wants to spend their time learning how
to do this for example if the property
go goes up in value over time that could
be long-term capital gains if you sell
it if you rent your property out for a
profit that would be rental income and
then you could reinvest your profits
back into the stock market to make even
more money I've also seen so many
articles out there that claim that 90%
of millionaires are invested in real
estate and even though I can't find any
studies to back this up I would not be
surprised if quite a few millionaires
hold some of their wealth in real estate
as a way to hedge inflation or as a
place to live and then finally number
six we have the income that you make
from working a second job or a side
Hustle I seriously think this is
probably one of the most underutilized
income sources that people are not
taking advantage of and that stops today
working on any sort of side business
that has the potential to grow
completely independent from your main
source of income is not only a good way
to make more money but also diversify in
case something happens to your main job
and you have nothing left to fall back
on I just want you to think about this
and ask yourself the question what do
you do between the hours of 600 p.m. and
midnight every single night that is 6
hours a day or almost an entire full
work day every single day that most
people don't utilize it all this is the
perfect chance to leverage your time
make more money and use the resource
that all of us have the exact same
amount of and that would be time and
finally since $500,000 is the amount
that would make most Americans feel
financially secure let's break down
exactly what you'll need to reach that
goal and how long it'll realistically
take if you start from nothing first for
purposes of this calculation I will
assume that you at least have the
average annual salary of $31,000 a year
and I understand that some people
watching this will have to build up to
that which if that's the case you're
best off figuring out exactly what you
want to do and make a plan to build up
to a consistent paycheck and if you're
making at least that or more than that
well perfect we can go on to the second
step in that would be minimize all of
your costs at all costs like it said
that the average American spends
$118,000 a year on non-essential items
and this is something that nearly
everybody could begin cutting back on
immediately this means living with
parents if you have that choice
available to you or living with
roommates or moving further away if you
don't mind a longer commute or anything
you can right now to reduce your housing
cost First from there make sure to cook
food at home avoid eating out drive a
good reliable used car that's decent on
gas and otherwise only buy things that
you absolutely need by doing this you're
going to have more money left over which
then brings us on to number third I'll
assume that with a $31,000 income living
frugally and cutting back in
discretionary spending you should be
able to save about $200 a month or
$2,400 a year if that's the case open up
a Roth th and invest all of that into a
broad market index fund that tracks the
entire market like VT saxs now you get
tax-free profits long-term growth a bit
of a dividend and you'll see some
consistent savings and if you're able to
save even more than that then smash like
button for the YouTube algorithm now
fourth I think this is the fun part but
find a side hustle or part-time work
that you could do after normal hours
maybe this could be working as a
restaurant server starting a side
business or doing anything for a few
hours a night just to earn a little
extra money even assuming an extra $35 a
night four nights a week that's an extra
$560 a month that you could use towards
investing in a Roth IRA and then once
you have enough Sal saved up we can move
on to number five and that would be
switch jobs like I mentioned earlier
workers who switch jobs every 2 to 3
years wind up making significantly more
money than those who stay within the
same company and even switching jobs
once sees an average pay raise of 15%
and if you're able to increase a $31,000
a year career by 15% that's an extra
$390 a month that you could save when
you combine all of that together with a
side hustle that even makes $35 a night
four nights a week that's $950 a month
in savings and if you literally just
maintain that you could reach your
$500,000 Target in 18 years at an 8%
return and after 30 years you'll have
$1.5 million which is basically your
entire retirement and that's all
assuming you do nothing else except for
that but number six realistically you're
not just going to stop there there's
nothing that says you can't switch jobs
every 2 to three years to end up making
significantly more so by year three or
four you should be able to leverage that
$31,000 career into something that earns
$46,500 a year and if you choose to
further save that difference that's an
extra $10,000 a year that you could
invest apply that to the existing $950 a
month that you were already saving under
this example and now that gives you
$1,750 a month that you could use
towards building your wealth and doing
that would allow you to reach more than
$500,000 in 13 years that also doesn't
include your side hustle income
increasing at all of which would more
than likely take the time frame below 10
years just by being able to save an
extra $580 a month but one of the most
difficult parts to maintain throughout
all of this is what's known as lifestyle
inflation this is what happens when
you're making $40,000 a year you're
saving some money there's no complaints
but then you start making $60,000 a year
so you reward yourself with maybe a
slightly nicer apartment or a slightly
newer car or you start eating out a
little bit more often not a huge
difference here nothing crazy but then
you start making $90,000 a year and all
of a sudden your current place isn't as
nice as it once was so you upgrade your
apartment to a higher floor and you get
an even nicer car but then a year later
you're making $150,000 a year and your
apartment seems to a bit mess so you go
and upgrade to a house your car isn't as
nice parked next to all the other BMWs
and Mercedes so you get something nicer
now you can actually start to travel but
the funny thing that happens with so
many people is that they wind up saving
the exact same dollar amount earning
$150,000 a year as they were when they
were making $40,000 a year despite now
making four times more that is what we
call lifestyle inflation in fact a
recent study even found that 44% of
Millennials earning above $100,000 were
living paycheck to paycheck and without
going through all of their expenses line
by line I can pretty much guarantee
that's mainly because of Lifestyle
inflation the only way to overcome this
is that if you make more money keep your
expenses the exact same don't change a
single thing and invest the difference
immediately or it could do what I do
which is just work so much that you
don't even have time to spend your money
there you go big brain but all in all by
doing this it's entirely possible to
grow your wealth from0 to $500,000 in 10
years even without a crazy high income
now I understand that even by reducing
your expenses living below your means
switching companies investing the
difference and doing everything else
listed here it's easier said than done
but it is entirely possible if you're
dedicated to increasing your income
sacrificing short-term discretionary
spending for the sake of investing more
pushing yourself outside your comfort
zone and making it a goal you have to
achieve this is something absolutely
doable over the next 10 years with a
decade's worth of sacrifice you have the
potential to set yourself up for the
rest of your life and it all begins
right here as soon as you smash the like
button for the YouTube algorithm so with
that said you guys thank thank you so
much for watching I really appreciate it
as always make sure to subscribe and hit
the notification Bell also feel free to
add me on Instagram my posts are pretty
much daily so if you want to be a part
of it there feel free to add me there as
my second channel the gram Stefan show I
post there every single day I'm not
posting here so if you want to see a
brand new video for me every single day
make sure to add yourself to that thank
you so much for watching and until next
time
5.0 / 5 (0 votes)